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A company has two products: A and B. It uses activity-based costing and prepares the...

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Accounting

A company has two products: A and B. It uses activity-based costing and prepares the following analysis showing budgeted cost and activity for each of its three activity cost pools:

Cost Pool Overhead Cost Budgeted Product A Product B Total
Activity 1 $ 80,000 200 800 1,000
Activity 2 $ 58,400 1,000 500 1,500
Activity 3 $360,000 600 5,400 6,000

The annual production and sales level of Product A is 18,188 units and the annual production and sales level of Product B is 31,652 units. The approximate overhead cost per unit of Product B under activity-based costing is:

Group of answer choices

a. $2.02

b. $5.00

c. $12.87

d. $22.40

Answer & Explanation Solved by verified expert
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